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© 2013 Holcim Ltd
Diversification of financingMarkus Unternährer, Head Capital Markets Bank Relationship
2013-11-05
© 2013 Holcim Ltd
Agenda
Holcim in a snapshotDiversification of financingCase study MXN bondsConclusions
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© 2013 Holcim Ltd
Product focus – two core segments and their channels
CementAggregates
Net sales CHF 21.5 billionCement Clinker
Product segments 2012 Net sales per segment 2012
217.5 million tonnesproduction capacity148 cement and grinding plantsSales: 148.0 milliontonnes
470 aggregatesplantsSales: 159.7 milliontonnes
1,286 RMX plants99 asphalt plantsSales of ready-mix concrete: 46.9 million m3
Sales of asphalt: 9.1 million tonnes
Aggregates
Other construction materials & services
10.4%
58.0%
31.6%
Op. EBITDA per segment 2012
Op. EBITDA CHF 4.0 billion
3.4%86.5%
10.1%
Other ConstructionMaterials and Services
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Holcim – well balanced global portfolio
Africa Middle EastEurope
Net sales per region 2012
14.7%26.1%
39.2%4.3%
15.7%
Europe
Sales volumes per region 2012
North America
Latin America
Africa Middle East
Asia Pacific (million t or m3) Net sales CHF 21.5 billion
Op. EBITDA per region 2012
Op. EBITDA CHF 4.0 billion
11.4% 14.9%
44.4%6.6%22.7%
• Cement 79.2• Aggregates 27.8• Ready-mix concrete 12.8
• Cement 24.9• Aggregates 14.0• Ready-mix concrete 10.2
• Cement 26.3• Aggregates 74.3• Ready-mix concrete 14.7
• Cement 12.0• Aggregates 41.3• Ready-mix concrete 8.1
• Cement 8.4• Aggregates 2.3• Ready-mix concrete 1.1
Asia PacificNorth AmericaLatin America
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Key financial figures – 9M 2013
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Million CHF Full Year 9M +/-(if not otherwise stated) 2012 2012 2013 LFL CIS FX Total
Net sales 21'160 15'908 14'941 -0.2% -3.2% -2.7% -6.1%
Operating EBITDA 3'889 3'077 2'951 1.0% -2.5% -2.6% -4.1%
Operating profit 1'749 1'829 1'798 4.0% -2.4% -3.3% -1.7%
Net income – shareholders of Holcim Ltd
610 779 1'040 33.5%
Cash flow 2'643 1'088 1'172 14.7% -4.3% -2.6% 7.8%
Net financial debt 10'325 11'525 10'280 -10.8%
Capex 1'593 848 1'282 51.2%
© 2013 Holcim Ltd
Cement production – a capital intensive business
Capital expansion investments (CHF m) Production capacity cement (mt)
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© 2013 Holcim Ltd
Financial debt, maturities and liquidity as of 30.9.2013
1 After risk-related adjustments of CHF 540 million from current financial liabilities to long-term financial liabilities
Maturity profile1 (CHF million)
Liquidity summary• Cash + marketable securities: CHF 3,115 million
• Cash + marketable securities + unused committed credit lines: CHF 7,795 million
Debt summary• Current financial liabilities1: CHF 3,368 million• Fixed to floating ratio: 54% fixed• Capital markets 81%; Loans 19% • Corporate vs. subsidiary debt: 81% Corporate• Average maturity financial liabilities: 4.5 years• CP borrowings: CHF 490 million• No financial covenants in Corporate credit lines
ST/LT ratings summary November 4, 2013• S&P Credit Rating: A-2 / BBB, outlook stable• Fitch Credit Rating: F2 / BBB, outlook stable• Moody’s Credit Rating: P2 / Baa2, outlook stable
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0
1'000
2'000
3'000
4'000
5'000
<1y 1-2y 2-3y 3-4y 4-5y 5-6y 6-7y 7-8y 8-9y 9-10y >10y
Loans Capital markets
© 2013 Holcim Ltd
Continuously accessing capital and loan markets around the world to cover funding requirements
CHF 450 m bond
CHF 950 m multicurrency loans
AUD 700 m bonds
AUD 200 m bilateral loans
BRL 1 bncapex
financing
MXN 4 bn bonds
USD 1 bn CP program
CAD 250 m RCF
EUR 500 m bond
CAD 300 m bond
USD 235 m RCFNZD 150 m
bilateral loansTHB 1.5 bnbilateral loan
CHF 350 m RCF
USD 50 m bond
AUD 320 m club deal
USD 750 m bonds
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Recent financings
© 2013 Holcim Ltd
Overall debt reduced by CHF 5.3 billion since 2008 – bank debt replaced by capital market financing
Loans
Capital marketsShare of capital market financing (r.h. scale)
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0%
20%
40%
60%
80%
100%
0
4'000
8'000
12'000
16'000
20'000
2008 2009 2010 2011 2012 Q3 2013
Financial liabilitiesCHF million
Share of capital market financing
© 2013 Holcim Ltd
CDS Share price
EUR (SSD)
CHF 400 m
EUR
EURGBP
CHFEUR
AUD
CHF
USD
CHF
THB CHFEUR 2 bn
AUDMXN
CHF
MXN
AUDEUR
AUDCAD
CHF 350 m
USDUSD
CHF 2.1 bn
0 CHF
20 CHF
40 CHF
60 CHF
80 CHF
100 CHF
120 CHF
Jan-08 May-09 Sep-10 Feb-12 Jun-130 bps
100 bps
200 bps
300 bps
400 bps
500 bps
600 bps
700 bps
800 bps
900 bps
1'000 bpsCapital market financing
Syndicated loan financingEquity financing
Strong diversification allows continuous access to capital and bank markets
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© 2013 Holcim Ltd
Financing programs complement other financings and provide flexibility and quick access to capital markets
EMTN program
MXN bond program
AUD bondprogram
U.S. CPprogram
EUR CPprogram
Capital markets funding distribution
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Capital markets funding distribution
© 2013 Holcim Ltd2013-11-05
Case study: MXN bond program• Set up a MXN 10 bn shelf program in Mexico to issue bonds guaranteed by Holcim Ltd
• Issued the first Mexican Holcim bonds in the amount of MXN 4.0 bn in 2012
• The proceeds of the issuance were passed on to Holcim México – our subsidiary in Mexico – as an intercompany loan
What we did
• In-depth analysis of the peculiarities and requirements of the Mexican debt capital market over a long period of time
• A joint project team with dedicated people from the head office and the Mexican subsidiary was put together
• Close collaboration with local banks and lawyers
• Focused roadshow in Mexico City and investor calls
• Holcim can issue up to MXN 10 bn in local bonds which provides us with an alternative funding source for our Mexican operations
• Short term bank debt was replaced with long term debt which lengthens the average maturity
• Financing costs were substantially reduced
How we did it
Results we achieved
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© 2013 Holcim Ltd
• Sole issuer: Holcim Capital México, S.A. de C.V.• Structure: Established in 2011
Program size MXN 10 bnShort-term and long-term notesListed in MexicoS&P and Fitch ratings (mxAAA, AAA mex)3 outstanding bonds
• Arrangers: BBVA, Citi, Santander• Dealers: “Dealers of the day” to be appointed for specific transactions• Drawdowns 30.3.2012: MXN 1’500 m 2012-2015 @ TIIE 28d + 57 bps
15.6.2012: MXN 800 m 2012-2016 @ TIIE 28d + 67 bps15.6.2012: MXN 1’700 m 2012-2019 @ 7.0%
• Benefits: Funding program to issue notes on a regular basisLong tenorsDiversification of investor baseFlexibleTypically lower financing costs than in local bank market
Holcim Mexican Peso bond program and drawdowns
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© 2013 Holcim Ltd
Financing structure
Holcim Ltd
Holcim Capital México, S.A. de
C.V.
CertificadosBursatiles Intercompany loans
Note: simplified structure
Holcim México
• Financing structure ensuresSame international rating for MXN bonds as for Holcim LtdLimited disclosure requirement for operating company Holcim MéxicoMinimum structural subordination of 70%
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• Language – all legal documentation had to be in Spanish. Tackled by project team familiar with the language and by translating main documents
• Transaction had to be postponed due to unfavorable capital market conditions in the beginning
• Mexican authorities sometimes unpredictable in their requests for additional documentation
• Transaction windows quite short due to regulatory approval process and closed periods
MXN bond program – main difficulties
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© 2013 Holcim Ltd
• Broad diversification of financing allowsTo optimize the currency mix of the balance sheet and cash flows (natural hedge)To tap the most favorable capital marketsTo access markets opportunisticallyTo lower financing costsTo broaden investor baseTo reduce counterparty risks (large investor base, no swaps)To reduce the risk that comes along with higher market volatility
• The MXN bond program allows us to finance our Mexican Peso needs in the local market at low costs
• Strong relationships to banks, investors and rating agencies are key in all markets
Conclusions
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© 2013 Holcim Ltd
Contact information and event calendar
Contact information
Corporate Finance & TreasuryPhone +41 58 858 87 20treasury-hts@holcim.comwww.holcim.com/bondholders
Investor RelationsPhone +41 58 858 87 87Fax +41 58 858 80 09investor.relations@holcim.comwww.holcim.com/investors
Mailing list:www.holcim.com/subscribe
Event calendar
February 26, 2014 Press and analyst conference on annual results for 2013
April 29, 2014 General meeting of shareholders
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© 2013 Holcim Ltd
Cautionary statement regarding forward-looking statementsThis presentation may contain certain forward-looking statements relating to the Group’s future business, development and economic performance. Such statements may be subject to a number of risks, uncertainties and other important factors, such as but not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macroeconomic and political trends; (4) fluctuations in currency exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigation; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this presentation. Holcim assumes no obligation to update or alter forward-looking statements whether as a result of new information, future events or otherwise.
Disclaimer
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